The Brief for Accountants & Financial Planners
August, 2017

Estate planning - separation and divorce

Two minute scenarios...

What impact do separation and divorce have on Wills?

Scenario One... Ben & Carmel - settlement, no divorce yet

Scenario: Ben and Carmel have recently finalised their settlement but have not yet divorced. Ben has not changed his Will which currently leaves everything to Carmel.

What's the issue? A separation, or settlement, does not invalidate a Will. Ben's executor will be obliged to pay the assets bequeathed to Carmel. In this case, all of the estate assets. That's not what Ben wants.

Solution: Ben needs to have a new Will drafted as soon as possible, noting that it has been drafted in 'contemplation of divorce'.

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Scenario Two... Glen & Diana - divorce and settlement

Scenario: Glen and Diana have recently divorced and have finalised the property settlement. Glen asks what impact that has on his Will, drafted when he was married.

What's the issue? Glen wants to leave his estate assets to his children, not Diana. If Glen was to die before changing his Will, that share of his estate that was going to Diana (in this case, all of his assets) would be treated as if he died without a Will, and the estate would be distributed according to intestacy legislation.

Solution: Glen should be encouraged to have his Will updated so that he gets to choose who gets his assets.

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Scenario Three... Rob & Sue - divorce, no settlement yet

Scenario: Although they are now divorced, Rob and Sue are yet to finalise their property settlement.

What's the issue? When drafting Rob's Will the need to provide for Sue in the event of his death should be considered. If he is going to be obliged to hand over property as part of the settlement, his death does not absolve him of the need to provide for his ex-wife.

Solution: To avoid a challenge by Sue, Rob's Will could be drafted so that Sue receives an appropriate sum of money from the estate if the settlement has not occurred before he dies, and nothing if it has. That way he does not need to have to have his Will re-drafted once the settlement occurs.

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More information for clients

Please feel free to forward this insight on Different Types of Wills to your clients. Or if they would like to discuss how we can help them please call 03 8621 9000 or email info@irongrouplawyers.com with their details and we will contact them, obligation free.

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